Our world is facing extraordinary challenges, from infectious disease and climate change to cyber-attacks and data fraud, writes Paul Lewis, Global CTO at Hitachi Vantara. While many businesses are struggling to stay afloat in the wake of the shutdown necessitated by the Covid-19 pandemic, the banking and financial services sector is, perhaps by chance, brilliantly well-prepared.
Why? Because it has been at the forefront of digital transformation for the last decade, successfully embarking on complex programs to fundamentally shift how it works, putting personalized customer experiences at the center of operations. This has created the kind of smoothly integrated, effortlessly multi-channel business that is the stuff of dreams for most CIOs.
I believe that banks can – and should – now keep evolving that modernized infrastructure to become an unstoppable force for good in customers’ lives. Some of our most progressive banking customers are talking to us about doing just that. The key to taking the next step forward? Data.
In this new four-part blog series, I’ll explore the unique opportunity that the sector now has to harness the potential of data to both continue to build a strong, futureproof business and innovate for the social and economic benefit of their customers. At Hitachi Vantara, we call it ‘Powering Good’ — and at a time when we’re all daring to re-envision how the future might look, I hope it gives you some useful food for thought.
Banks and related financial institutions have a special role to play in today’s largely digitized world. Not only have they innovated ahead of other sectors and so are already agile, modernized and digital but they also sit at the heart of society, creating a bridge between global enterprise and local communities. As such, they’re perhaps uniquely able to act with scale and urgency to solve some of the tough social challenges the world faces, while also strengthening and future-proofing their own business models.
I’ve identified four elements that I believe any banking or financial services CIO keen for their organization to pursue the greater good alongside profits now urgently needs to consider:
1. Understand why data is the right focus rather than infrastructure and applications: how can you make data less rigid and hierarchical, more interactive and agile?
2. Adopt a mature strategy for monetizing data to secure business success, shorten the coming recession and do practical and positive things for communities.
3. Ride the innovation wave — don’t reinvent the wheel finding the right partners who are expert in the tech they need, offering ready-made, proven blueprints.
4. Grow banking eco-systems diversely yet holistically mirroring how people live in the emerging world and both guiding and embracing other sectors to drive social good.
This first blog focuses on the first element in that list: Understanding why data is the right focus.
All companies are becoming technology companies.
The fact is that our physical and digital worlds are converging at an extraordinary rate, prompted by new technologies such as IoT and robotics which are generating unfathomably large new data loads. Gartner projects that there will be nearly 21 billion connected ‘things’ in the world by 2020. According to the World Economic Forum, 1 trillion sensors will be connected to the internet in 2025.
Right now, the most competitive financial institutions out there are engaged in building a digital twin for their physical world. This data-based replica of their physical assets, processes, people, places, systems and devices all integrated into IoT, AI and analytics systems aims to create a living simulation model. This allows an organization to confidently drive digital transformation (DX) by proactively modelling, testing and transforming data into insights. These insights can then be turned into monetization opportunities and monetization opportunities into richer customer experiences, which can be designed to power all sorts of positive social outcomes.
Making ‘customer first’ work for the world
DX is traditionally about evolving your solution sets and approach in a timely way to do things better than your competitors — whether that’s optimizing logistics, improving customer experience or rolling out exciting new AI-powered operating models. At the heart of it is almost always the desire to focus on delivering your products in the way customers want to receive them.
With populations around the world more vulnerable but also more tech-enabled than ever, putting the genuine economic and social needs of customers at the heart of this transformation activity is a great way for the banking sector to power good. By building data eco-systems that help deliver new services customers actually need in ways that really work for them, banks can help to ensure their own financial stability and success and – by extension – that of society.
Every DX project is really a data project
I’ve long believed that the smartest way to approach DX is not as a series of complex infrastructure or application development projects, but instead to focus on leveraging that ultimate operational gold: data. Why? Because the fact is that infrastructure’s relevance and ability to scale starts degrading almost from the point of delivery. Application development projects almost always bring with them new complexity, security and integration issues too.
Data is different. It’s pure and valuable from the point of creation to deletion — and can become increasingly more valuable the more of it you have, delivering better insights and driving game-changing business algorithms.
So where do you start?
Effecting the good in data requires a mature strategic approach designed to render rigid and hierarchical data structures more interactive and agile. That makes it easy for the banking and financial sector to manipulate data to drive socially-motivated projects and practically power good, improving quality of life for their customers, as well as loyalty and profitability for their business.
In the next blog in this series, I’ll look in more detail at how a powerful Hitachi Vantara data strategy supported by our proven track record can deliver the unparalleled results that the sector needs.
This article was previously featured on Banking Exchange at https://www.bankingexchange.com/component/k2/item/8350-harnessing-data-to-power-good.